Why Germany seems not to want a quick fix for the euro crisis • Hacker News Board

Re: Why Germany seems not to want a quick fix for the euro crisis

#111

Post by Confusion » Wed, Oct 05, 2011, 8:34 PM UTC

harryf wrote: post #8

As the article makes a point of mentioning Angela Merkel... > All this is true. Yet Mrs Merkel seems to lack a sense of urgency. Despite the world’s calls for action, she does not believe in bold strokes—be it letting Greece default, or issuing Eurobonds to mutualise governments’ debt. Only a slow, step-by-step approach will work. In other words, the pain, austerity and market turmoil will go on for the foreseeable f…

Nobody grasps the complexities of financial markets. Everyone is just along for the ride. If anyone grasped the complexities, they would either be able to solve the current mess or be able to tell it is unsolvable. Instead, everyone is handwaving, guessing and trying whatever ridiculous thing they can to keep the system from collapsing.

There are a few that have found how to profit from what's going on: not because they understand how the system in general works, but because they understand some minor parts a bit better than others.

Re: Why Germany seems not to want a quick fix for the euro crisis

#112

Post by coldarchon » Wed, Oct 05, 2011, 8:43 PM UTC

gahahaha wrote: post #79

IdeaHamster wrote: post #57

Earlier quoted context omitted.

There's an interesting extension of this line of thought. My sister-in-law works in Istanbul for a Greek company. She says that most of the actual profit-generating work done for this company is done in Romania or Turkey. The Greek offices, from what she describes, are more or less completely dysfunctional. Now, take that insight of conditions on the ground along with a chart of the growth of the Greek vs Turkish eco…

Turkey has grown strongly lately, but GDP/Capita is still 1/3 of Greece and 1/5 of Germany. I wish them all the best, but they are still a quite poor country. (and if you look at stuff like the acceptance of evolution (extremely low), an argument could be made that they are quite backwards too)

not to forget their inflation rate is always twice as high as their economic growth ..

Re: Why Germany seems not to want a quick fix for the euro crisis

#113

Post by coldarchon » Wed, Oct 05, 2011, 8:53 PM UTC

jfruh wrote: post #90

jules wrote: post #86

Earlier quoted context omitted.

Some Turks joke that the Turkish army has the largest gay porn collection in the world. According to a Turkish friend of mine, yours is not an accurate characterization of Turkey. There are still huge problems with democracy, power of the army, corruption, media controlled by people in power, torture, Cyprus, and more. According to him many of these things are worsening -- he is afraid that Turkey is going to go furt…

I am not at all trying to minimize Turkey's real problems. But many of the Eastern European EU states also have some of the same or similar problems (particularly Romania and Bulgaria). In their cases much of the reason given for admitting them to the EU was that membership would bring them closer to European norms. (Indeed, this is an incentive held out by those in Europe who favor Turkish EU membership.) My point i…

you DO understand their population is huge BECAUSE of islam? At the beginning of the last century they WERE 10 million Turks.

Re: Why Germany seems not to want a quick fix for the euro crisis

#114

Post by samstave » Wed, Oct 05, 2011, 8:55 PM UTC

jonnathanson wrote: post #35

paulkoer wrote: post #5

As a German I must say that in my opinion this article captures the German sentiment very well. On the one hand it is short sided, it will likely lead to more economic problems than necessary and the stance of the Euro members (and Germany especially) on Greece is hurting the economy there much more than necessary. On the other hand I do feel that some of this sentiment is justified. After all the example of Italy (B…

The sentiment is justified, but the position is untenable. With every passing day, Greek debt compounds massively, and the hole gets bigger. Meanwhile, the uncertainty in the markets causes further volatility and pain for all concerned, and you risk the setting in of total panic. You end up with the worst of both worlds: all the market pain of a Greek default, without the default itself...but with the default still q…

It was mentioned today that the Greek government employs TWENTY PERCENT of the population - and there was a 100-year old constitutional law that prevented the effective firing of anyone working in the government.

This is institutionalized graft and is surely a main contributing factor in the corruption.

Re: Why Germany seems not to want a quick fix for the euro crisis

#115

Post by tsotha » Wed, Oct 05, 2011, 9:08 PM UTC

_delirium wrote: post #110

tsotha wrote: post #102

Earlier quoted context omitted.

Yes, everyone knew the Greeks were cooking the books. Hell, even the press knew - it was in the papers. But the expectation was that once they joined the Euro they would act more like Germans. That seems to have been a bit of a miscalculation.

I do think there have been significant improvements in Greek public administration since joining the Euro, but miracles would've been needed to get the turnaround that would've been necessary in such a short time. If Greece had had 20 years to gradually get its economy in line with western Europe, I think it was on pace to do so, or at least come close, but the 7 years between it joining the Euro in 2001 and the fina…

You're being far too generous. It's not just that the public administration was bad before the Euro - it got worse after 2001 when politicians used borrowed money to buy votes. Pay for Greek civil servants has doubled since 2001 in real terms.

The really sad part of all this is it represents a horribly squandered opportunity. If expenditures had been kept steady and the government just rolled over existing debt in 2001 into bonds with the new far lower interest rates it would have been a win for everyone.

Re: Why Germany seems not to want a quick fix for the euro crisis

#116

Post by Uchikoma » Wed, Oct 05, 2011, 9:26 PM UTC

j_col wrote: post #109

Uchikoma wrote: post #94

Earlier quoted context omitted.

And then I bail you out with the money from my high income tax. You have the car. The carmaker has it's money. The bank has it's money. I don't have a car. I've paid for all this ;-)

Eh, who exactly is getting bailed out? I think you mean loans, which are expected to be paid back in full (and up until very recently, interest was also paid on these "bail outs" making it a profitable venture for the country doing the lending).

With bail out, I mean you default on the debt and I pay your dept towards a bank.

Re: Why Germany seems not to want a quick fix for the euro crisis

#117

Post by kbatten » Wed, Oct 05, 2011, 10:10 PM UTC

discreteevent wrote: post #61

yequalsx wrote: post #27

Earlier quoted context omitted.

I've said this over and over again to Germans that I know and they simply don't believe what you say. They really think that they are bailing out profligate Greeks and that there is no benefit to them. Politically, it isn't feasible for Merkel to come out and say that German banks need to be bailed out. It's much easier to talk about European unity and solidarity as the reason for "bailing" out Greece. Germans pride…

I agree. The simplest way to make this clear is to simply let the Greek banks default (and any other banks for that matter). This will expose the German banks and the German Government will be forced to bail them out. This bailout will be a much easier sell than the current one as it will be clear to the German taxpayer that they are bailing out their own banks who made bad bets out of greed, lack of diligence and ju…

One thing I'm somewhat confused about is why a bailout is better than default. In both cases the banks cannot pay back loans so their credit is worthless right? In a bailout the government becomes the bank (through a proxy) but its still the governments credit, not the banks'. So keeping the banks alive, instead of allowing them to default would keep jobs, but wouldn't it be keeping the jobs of people who, for lack of a better term, didn't actually do their job?

Re: Why Germany seems not to want a quick fix for the euro crisis

#118

Post by morsch » Wed, Oct 05, 2011, 10:59 PM UTC

hugh3 wrote: post #77

harryf wrote: post #8

As the article makes a point of mentioning Angela Merkel... > All this is true. Yet Mrs Merkel seems to lack a sense of urgency. Despite the world’s calls for action, she does not believe in bold strokes—be it letting Greece default, or issuing Eurobonds to mutualise governments’ debt. Only a slow, step-by-step approach will work. In other words, the pain, austerity and market turmoil will go on for the foreseeable f…

it's worth pointing out, by comparison to other world leaders, Angela Merkel has a PhD in Physics (Quantum Chemistry in fact). In other words she's more than capable to grasping the complexities of financial markets. I also have a PhD in quantum chemistry, and I don't think this in itself qualifies me to understand economics any better than anyone else. Actually there was an interesting article on the subject of why…

Because they are smart enough to talk themselves into anything. Ordinary mortals don’t engage in fancy mental gymnastics to reach conclusions that defy common sense. But intellectuals are particularly prone to this.

Huh? Citation needed. For both of those claims. Actually, three claims: 1) Intelligent people talk themselves into anything. 2) That is why they make a hash of things. 3) Ordinary people do not engage in mental gymnastics to reach conclusions that defy common sense. Also, which is it, intellectuals or intelligent people?

Re: Why Germany seems not to want a quick fix for the euro crisis

#119

Post by bluedanieru » Thu, Oct 06, 2011, 2:23 AM UTC

hugh3 wrote: post #50

mtts wrote: post #34

Earlier quoted context omitted.

Markets are indeed composed of many agents, people and institutions squandering your pension money, all of whom hide behind the faceless market, arguing that if "the market" is doing it, it has to be right. Which is exactly what got us into this mess in the first place - everyone shirking off responsibility for their actions.

"Rational markets", eh? Does that mean that you should be forced to sell things for a price lower than you're willing to accept, or that you should be forced to buy things for a price higher than you're willing to pay?

Ah yes, the poor and irresponsible financiers have to take a haircut. Better that the Greek people should pay the price for a generation for little more than believing the lies their politicians told them to get elected, as they piled on the debt? If there were a way to wring a solution to this crisis out of those most responsible (Greek politicians) I would have us do it, but there isn't. So irresponsible lenders and irresponsible voters, and nations who perhaps irresponsibly guided Greece into the Euro in the first place, will have to share the burden. Sorry this doesn't jive with your Randian neo-libertarian bullshit ideas about how things actually work.

Re: Why Germany seems not to want a quick fix for the euro crisis

#120

Post by bluedanieru » Thu, Oct 06, 2011, 2:32 AM UTC

_delirium wrote: post #83

hugh3 wrote: post #73

Earlier quoted context omitted.

Sounds like Animal House: "You fucked up! You trusted us."

That happens pretty commonly even in a traditional view of debt, though the dividing line for whether the lender or lendee is more to blame varies. At one extreme, if you lend money to an alcoholic who's well known for not paying back his loans, and he spends it on alcohol and doesn't pay you back, not too many people will be sympathetic to you for making an obviously-stupid loan. In fact they might blame you for ena…

This is a fundamental tenet of what lending is all about. It's why a bank won't just give money to anyone for any reason at all. It's something everyone has considered in their personal life on a micro level, at some point. Yet in certain contexts the very idea of a difference between responsible and irresponsible lending, and accountability for same, goes right out the window. Conveniently when it does it always seems to be in support of funneling huge amounts of taxpayer money to large banks, or foisting indentured servitude on the bankrupt.